ARE SHOCKS TO ENERGY CONSUMPTION IN USA PERMANENT OR TEMPORARY?: SECTORAL ANALYSIS

Yıl 2020, Sayı: 39, 105 - 116, 30.06.2020

Burcu Yavuz Tiftikçigil , Burak Güriş

https://doi.org/10.35343/kosbed.664851

Öz

Energy is one of the most important strategic factors for sustainable economic growth. Energy consumption is investigated within the framework of four sectors, i. e. residential sector, commercial sector, industrial sector and transport sector. The energy consumption levels of these sectors, long term consumption amounts and the sustainability of this consumption as well as whether these shocks are temporary or permanent play a role in the development of energy policies for countries.
The energy consumption of the US, listed under the developed country category, has been increasing steadily in connection with its economic growth. In this respect, the purpose of this study is to analyze at the sectoral level whether the shocks in the USA’s sectoral energy consumption are temporary or permanent.
The annual data over the period 1949 – 2014 are analyzed using the RALS LM unit root test method in this study investigating whether the shocks in total energy consumption in the US economy are temporary or permanent as per sectors.
The study introduced two basic contributions to literature. The first contribution is that it is the first study in literature investigating the situation at the sectoral level in the US. The second contribution is the methodology used. The RALS LM unit root test offers two basic advantages. Firstly, the RALS LM test does not depend on the nuisance parameter and secondly, the RALS LM test utilizes information on non-normal errors.
According to the analyses made, the shocks in energy consumption in the transport sector of the US have got a permanent impact.

Anahtar Kelimeler

U.S. Energy Consumption, U.S. Energy Shocks, Sectoral Energy Consumption, RALS Unit Root Test

Are Shocks to Energy Consumption in USA Permanent or Temporary? Sectoral Analysis

Öz

Energy is one of the most important strategic factors for sustainable economic growth. Energy consumption is investigated within the framework of four sectors, i. e. residential sector, commercial sector, industrial sector and transport sector. The energy consumption levels of these sectors, long term consumption amounts and the sustainability of this consumption as well as whether these shocks are temporary or permanent play a role in the development of energy policies for countries.
The energy consumption of the US, listed under the developed country category, has been increasing steadily in connection with its economic growth. In this respect, the purpose of this study is to analyze at the sectoral level whether the shocks in the USA’s sectoral energy consumption are temporary or permanent.
The annual data over the period 1949 – 2014 are analyzed using the RALS LM unit root test method in this study investigating whether the shocks in total energy consumption in the US economy are temporary or permanent as per sectors.
The study introduced two basic contributions to literature. The first contribution is that it is the first study in literature investigating the situation at the sectoral level in the US. The second contribution is the methodology used. The RALS LM unit root test offers two basic advantages. Firstly, the RALS LM test does not depend on the nuisance parameter and secondly, the RALS LM test utilizes information on non-normal errors.
According to the analyses made, the shocks in energy consumption in the transport sector of the US have got a permanent impact.

Anahtar Kelimeler

ABD Enerji Tüketimi, ABD Enerji Şokları, Sektörel Enerji Tüketimi, RALS Unit Root Test

Kaynakça

• Achour, H., and M. Belloumi (2016). “Decomposing the influencing factors of energy consumption in Tunisian transportation sector using LMDI method”. Transport Policy, 52, 64-71.
• Aslan, A., and H. Kum (2011). “The stationarity of energy consumption for Turkish disaggregate data by employing linear and nonlinear unit root tests”. Energy, 36, 4256-4258.
• BP Statistical Review (2016). http://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy/country-and-regional-insights/united-states.html (18.09.2016).
• Chen, P.-F., and C.-C. Lee (2007). “Is energy consumption per capita broken stationary? New evidence from regional-based panels”. Energy Policy, 35, 3526-3540.
• Dickey, D. A., & Fuller, W. A. (1979). “Distribution of the estimators for autoregressive time series with a unit root”. Journal of the American Statistical Association, 74 (366a), 427-431.
• Doğan, E. (2016). “Are shocks to electricity consumption transitory or permanent? Sub-national evidence from Turkey”. Utilities Policy, Article in Press. 1-8.
• EIA (2015). “U.S. primary energy consumption by source and sector”. (https://www.eia.gov/totalenergy/data/monthly/pdf/flow/css_2015_energy.pdf. (18.09.2016)
• Fallahi, F., M. Karimi, and M.-C. Voia (2016). “Persistance in world energy consumption: Evidence from subsampling confidence intervals”. Energy Economics, 57, 175-183.
• Gozger, G. (2016). “Are shocks to renewable energy consumption permanent or transitory? An empirical investigation for Brazil, China, and India”. Renewable and Sustainable Energy Reviews, 66, 913-919.
• Gross, C. (2012). “Explaining the (non-) causility between energy and economics growth in the U.S. – A multivariate sectoral analysis”. Energy Economics, 34, 489-499.
• H. H. Lean, and R. Smyth (2013). “Will policies to promote renewable electricity generation be effective? Evidence from panel stationarity and unit root tests for 115 countries”. Renewable Energy and Sustainable Energy Reviews, 22, 371-379.
• Hessari, F. A. (2005). “Sectoral energy consumption in Iran”. Renewable and Sustainable Energy Reviews, 9, 203-214.
• IEA (2014). “Energy Policies of IEA Countries-The United States”. IEA 2014 Review, 21, 113.
• Kum, H. (2012). “Are fluctuations in energy consumption transitory or permanent? Evidence from a panel of East Asia & Pasific countries”. International Journal of Energy Economics and Policy, Vol. 2. No. 3, 92-96.
• Lee, J., Meng, M. and Strazicich, M. C. (2012). “Two-step LM unit root tests with trend-breaks”. Journal of Statistical and Econometric Methods, 1, 81–107.
• Meng, M., Lee, J. & Payne, J. (2016). “RALS-LM unit root test with trend breaks and non-normal errors: application to the Prebisch-Singer hypothesis”. Studies in Nonlinear Dynamics & Econometrics, 21(1), pp. 31-45
• Meng, M., Payne, J. E., & Lee, J. (2013). “Convergence in per capita energy use among OECD countries”. Energy Economics, 36, 536-545.
• Mishra, V., & Smyth, R. (2017). “Conditional convergence in Australia's energy consumption at the sector level”. Energy Economics, 62, 396-403.
• Mishra, V., and R. Smyth (2016). “Conditional convergence in Australia’s energy consumption at the sector level”. Energy Economics, (Article in press).
• Narayan, K. N., and R. Smyth (2007). “Are shocks to energy consumption permanent or temporary? Evidence from 182 countries”. Energy Policy, 35, 333-341.
• Narayan, K. N., S. Narayan, and R. Smyth (2008). “Are oil shocks permanent or temporary? Panel data evidence from crude oil and NGL production in 60 countries”. Energy Economics, 30, 319-936.
• Özcan. B, and I. Öztürk (2016). “A new approach to energy consumption per capita stationarity: evidence form OECD Countries”. Renewable and Sustainable Energy Reviews, 65, 332-344.
• Öztürk, I. and A. Aslan (2014). “Are Fluctuations in Electricity Consumption Permanent or Transitory? Evidence from a Nonlinear Unit Root Test in High-income OECD Countries”. Journal Energy Sources, Part B: Economics, Planning, and Policy, Volume 10, 2015 - Issue 3, 257-262.
• Perron, P. (1989). “The great crash, the oil price shock, and the unit root hypothesis”. Econometrica: Journal of the Econometric Society, 1361-1401.
• Rahman, Md. S., A. H. Md. Noman, F. Shahari, M. Aslam, C. S. Gee, C. R. Isa, and S. Pervin (2016). “Efficient energy consumption in industrial sectors and its effect on environment: A comparative analysis between G8 and Southeast Asian emerging economies”, Energy, 97, 82-89.
• Shahbaz, M., N. Khraief, M. K. Mahalik, and K. U. Zaman (2014). “Are fluctuaions in natural gas consumption per capita transitory? Evidence from time series and panel unit root tests”. Energy, 78, 183-195.
• Song, M., W. Zheng, and Z. Wang (2016). “Environmental efficiency and energy consumption of highway transportation system in China”. Int. J. Production Economics, 181, 441-449.
• Tiwari, A. K., and C. T. Albulescu (2016). “Renewable-to-total electricity consumption ratio: Estimating the permanent or transitory fluctuations based on flexible Fourier stationarity and unit root tests”. Renewable and Sustainable Energy Reviews, 57, 1409-1427.
• U.S. Energy Information Administration, (2015). “Monthly Energy Review”, Release Date: June 25, 2015, Next Update: July 28.
• Zhang, M., G. Li, H.L. Mu, and Y.D. Ning (2011). “Energy and exergy efficiencies in the Chinese transportation sector, 1980-2009”. Energy, 36, 770-776.